Lifting sanctions does not help Iran’s petrochemical exports

Iran's petrochemical exports failed to show a significant increase in recent months despite the fact that Western countries suspended prohibition on the import, purchase or transport of the Islamic Republic's petrochemical products and related services since January.

Iran's petrochemical exports surpassed $10.723 billion during the last Iranian calendar year (ended on March 21), which indicates an increase by only 1.01 percent compared to the preceding year, the country's customs administration reported on April 7.

The total volume of exported petrochemicals in the last year stood at 14.5 million tons which is even 4 percent less than the previous year.

Iran has exported $868 million worth of petrochemicals in the twelfth month of last Iranian calendar year, which indicates an increase by 3.6 percent compared to the $835 million worth of petrochemical exports of the preceding month. However the figure is also lower than the average monthly exports during the last year which was $893.5 million.

While Western countries suspended certain sanctions on Iran's petrochemical products as the Geneva nuclear deal came into force on Jan. 20, it seems that some domestic problems prevented Iran's petrochemical exports to increase significantly.

The Iranian administration was forced to temporary halt feeding gas to petrochemical complexes on account of increased domestic gas consumption due to severe cold season that led to a shortage in the country, in particular during last December and January.

Iranian media outlets reported that the oil ministry has ordered the petrochemical complexes to lower their production rate to the minimum, or even halt production until further notice.

The Director General of the Petrochemical Employers Association, Ahmad Mahdavi told Mehr News Agency on Feb.4 that the damage of decreasing or halting petrochemical production during past 40 days is estimated at $1.5 billion.

Iranian petrochemical complexes need 30 to 35 million cubic meters of gas per day, but the gas supply to the petrochemical complexes was reportedly reduced to 15 million cubic meters earlier in February.

With the ending of the cold season and resolving the gas shortage challenge, Iran may hopefully increase its petrochemicals exports in the current year significantly, thanks to the Geneva nuclear deal.

The country's administration also has plans to prevent the last year's gas shortage problem repeat in the current year.

Iran plans to inaugurate the Phases 12, 15, 16, 17 and 18 of the South Pars gas field before the next cold season, which will increase the country's gas output by 100 million cubic meters per day (mcmd), oil minister, Bijan Namdar Zanganeh said on April 5.

According to BP's latest yearly report, Iran's dried gas output is about 160 bcm, a little more than domestic consumption level.